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R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: Further re selling prices
20-Jun-2022 / 10:51 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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R.E.A. Holdings plc ("REA" or the "company")
Further re selling prices
Further to the company's announcement in May 2022 regarding selling prices
for crude palm oil ("CPO") and crude palm kernel oil ("CPKO"), the
Indonesian government has published a change to the export duty structure
with effect from 10 June 2022. There has been no change to the export levy
structure.
REA sells CPO into the local Indonesian market which is not subject to
export levy or export duty. However, arbitrage between the Indonesian and
international CPO markets normally results in a local price that is
broadly in line with prevailing international prices after adjustment of
the latter for delivery costs and export tariffs and restrictions. Changes
to export tariffs and restrictions therefore have an indirect effect on
the prices that REA achieves on sales of its CPO
Export tariffs comprise export duty and export levy. Both are calculated
on a sliding scale by reference to a CPO reference price that is set
periodically by the Indonesian government on the basis of CIF Rotterdam
and other recognised benchmark CPO prices. The export tariffs applicable
from 10 June 2022 are set out below. The incremental export duty for CPO
and CPKO have not changed up to a reference price of less than $1,000 per
tonne but have increased from a reference price of more than $1,000 per
tonne from the previous rules.
The CPO reference price is $1,700 per tonne for June and is expected to be
$1,646 per tonne from July 2022 which, being above $1,500 per tonne, will
result in total export tariffs of $663 per tonne. This represents an
increase of $88 per tonne from the total export tariffs that were payable
under the previous rules.
The domestic market obligation (“DMO”) was re-introduced in June at a
factor of 1:5 local to export. In order to obtain an export permit
exporters are required to prove, through online government systems, that
their DMO has been complied with. These processes have been slower than
anticipated which has led to high domestic stocks of palm oil and its
derivatives. The government has subsequently introduced an export
mechanism for the acceleration of distribution to optimise and stabilise
the production of palm oil that involves paying an additonal duty of $200
per tonne which waives the DMO rules for exporters. This waiver program is
valid until the 31 July 2022.
Combined export levy and export duty (before DMO waiver duty) applicable
from 10 June 2022
CPO reference price
From To Levy Duty Total Net price*
$ $ $ $ $ $
- 750 55 - 55 695
751 800 75 3 78 722
801 850 95 18 113 737
851 900 115 33 148 752
901 950 135 52 187 763
951 1,000 155 74 229 771
1,001 1,050 175 124 268 751
1,051 1,100 195 148 311 757
1,101 1,150 215 178 359 757
1,151 1,200 235 201 401 764
1,201 1,250 255 220 438 775
1,251 1,300 275 240 475 785
1,301 1,350 295 250 495 805
1,351 1,400 315 260 515 825
1,401 1,450 335 270 535 845
1,451 1,500 355 280 555 865
1,501 1,550 375 288 575 887
*At top of band
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ISIN: GB0002349065
Category Code: MSCM
TIDM: RE.
LEI Code: 213800YXL94R94RYG150
Sequence No.: 169455
EQS News ID: 1379343
End of Announcement EQS News Service
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